Friday, September 23, 2011

HTC subsidiary-to-be S3 Graphics sues Apple over two patents in new ITC complaint and federal lawsuit

Yesterday (Thursday, September 22, 2011), S3 Graphics, a company in the process of being acquired by HTC, filed two new complaints against Apple, further escalating the patent dispute between the "HTC camp" and Apple:

an ITC complaint (click here for the official notice) over "Electronic Devices with Graphics Data Processing Systems, Components Thereof, and Associated Software"

a federal lawsuit in the District of Delaware, targeting "certain electronic devices and components, [for example], the Apple iPhone, iPad, an[d] iPod Touch mobile devices, Apple Mac desktop and notebook computers, alone or in combination with associated system and application software sold or distributed by Apple"

S3 Graphics asserts the same two patents in either complaint:

U.S. Patent No. 5,945,997 on "block- and band-oriented traversal in three-dimensional triangle rendering" (applied for by S3 in 1997)

U.S. Patent No. 5,581,279 on "VGA controller circuitry" (applied for by Cirrus Logic in November 1993, granted by the USPTO in December 1996 and sold to S3 in 1998; it appears that this patent will expire in late 2013, but an ITC investigation is usually finished within about 18 months, so an import ban could be in effect for roughly eight months if S3 successfully enforced this one)

If the ITC agrees to investigate the new complaint, the "companion lawsuit" filed in Delaware will be stayed until after the ITC trial, provided that Apple asks for it. Companion lawsuits are filed because the ITC cannot order damages -- only federal courts can.

Now let's talk about how those filings fit into the overall dispute between Apple and HTC.

The dispute between Apple and the "HTC camp" started in March 2010 with Apple's first ITC complaint against HTC. In May 2010, HTC retaliated with an ITC complaint against Apple (which looked rather weak), and S3 Graphics filed its first ITC complaint against Apple.

Preliminary decisions ("final initial determinations" as well as decisions to review them) have already been taken by the ITC with respect to two of those three complaints:

An Administrative Law Judge (ALJ) found Apple to infringe two S3 patents, but only with certain Macintosh computers and not with its iOS devices. The Commission (the six-member decision-making body at the top of the ITC) is reviewing that decision in its entirety, which could make things better or worse for the Macintosh line but it appears rather unlikely that Apple's iOS devices (iPhone, iPad, iPod) would be found to infringe.

Concerning HTC's first ITC complaint against Apple, the target date was recently pushed back by a month. Based on the current schedule, a final initial determination is due by October 17, 2011. Those "IDs" sometimes come a week or two ahead of schedule.

Meanwhile, three second complaints have been filed with the ITC by these parties:

Earlier this week, the Financial Times quoted a European lawyer representing HTC before the High Court of England and Wales as saying that an action brought by HTC against Apple in London in late July would go to trial in late March 2012, most likely before a German lawsuit brought by Apple would be decided. The article refers to actions in Mannheim and Munich. I don't have access to the documents but by far the most likely interpretation of this is that HTC filed declaratory judgment actions against four Apple patents in London, and Apple filed an infringement action in Mannheim. The Munich case won't be another infringement action: German patent cases can be, and frequently (but not always) are, interrupted pending nullity actions (attempts to invalidate the asserted patents) before the Federal Patent Cout in Munich. From a legal point of view, the German court is not at all bound by whatever the London court may decide on the validity of those patents since European patents have to be litigated country by country. In Apple v. Samsung, a German court also chose to disagree with a foreign (in that case, Dutch court on the validity of a design-related right.

Ultimately, neither Samsung or HTC can fend off Apple's patent assertions just by way of public statements and scattershot litigation. If they want to achieve anything, they will have to score important wins in court. So far, Apple is on the winning track against both of them.

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About Me

Florian Mueller is a former award-winning intellectual property activist with 25 years of software industry expertise spanning across different market segments (games, education, productivity and infrastructure software), diverse business models and a variety of technical and commercial areas of responsibility. In recent years, Florian advised a diversity of clients on the patent wars surrounding mobile devices, and on their economic and technical implications. (In order to avoid conflicts of interest, Florian does not hold or initiate transactions in any technology stocks or derivatives thereof.) He is now developing a game app for smartphones and tablet computers.